Expense Reimbursement Desk Reference - Freddie Mac

1 Expense Reimbursement desk Reference October 2017 Notice The information in this publication is intended to provide general guidance to Freddie Mac Servicers. This information is offered as an aid in - not a substitute for - complying with the requirements set forth in the Single-Family Seller/Servicer Guide (the Guide), as amended. Each Freddie Mac approved Servicer must comply with all the provisions of the Guide, and of all other Purchase Documents, as that term is defined in the Guide. This publication does not constitute a part of the Guide or a Purchase Document. The requirements and guidelines referenced in this publication are subject to change at any time by Freddie Mac. Publication Number: 239 Last Updated: October 2017 2017 Federal Home Loan Mortgage Corporation. All rights reserved. This Page Intentionally Left Blank Freddie Mac Document Expense Reimbursement desk Reference i October 2016 Table of Contents About Your Expense Reimbursement desk Reference .

2 Iii CHAPTER 1: THE Reimbursement SYSTEM Using the Reimbursement System .. 1-1 How to Obtain Your User ID and Password for the Reimbursement 1-1 How to Access the Reimbursement System .. 1-3 CHAPTER 2: PREPARING AND SUBMITTING YOUR CLAIMS Preparing and Submitting Your Claims .. 2-1 Forwarding Remittances .. 2-1 Expense Offsets .. 2-2 Submission Types and Timeframes .. 2-4 Supporting Documentation .. 2-9 Expense Reimbursement and the MI Claim Filing Process .. 2-9 CHAPTER 3: DOCUMENTING expenses AND INCOME/CREDIT Documenting the Billing Period and Vendor .. 3-1 Documenting Insurance expenses .. 3-2 Documenting Tax expenses .. 3-3 Documenting Yard Maintenance expenses .. 3-4 Documenting Income/Credit to Offset expenses .. 3-4 Documenting Similar Expense and Income/Credit Items .. 3-4 Documenting HOA, PUD, and Condominium Assessments .. 3-5 CHAPTER 4: Expense AND INCOME CODES Expense Codes Listed by Activity Type .. 4-1 Income Codes Listed by Activity Type .. 4-25 City of Chicago, Illinois Vacant Property Ordinance Expense Codes.

3 4-27 CHAPTER 5: 1-4 UNIT PROPERTY APPROVED Expense AMOUNTS Key Terms .. 5-1 Expense Amounts .. 5-2 Attorney Fees and Title Work Expense Limits .. 5-11 Reimbursement Requirements When You Must Restart a Foreclosure .. 5-17 Table of Contents Expense Reimbursement desk Reference Freddie Mac Document October 2016 ii CHAPTER 6: REQUESTS FOR PRIOR APPROVAL (RPAs) What is a Request for Prior Approval (RPA)?.. 6-1 Preparing and Submitting the RPA .. 6-1 RPAS for Property Preservation .. 6-2 RPAs for Extension of Days .. 6-2 RPAs for Legal Fees .. 6-3 RPAs for Transfer Taxes .. 6-4 CHAPTER 7: Expense Reimbursement AUDITS Expense Reimbursement Audit Overview .. 7-1 CHAPTER 8: NON-REIMBURSABLE expenses List of Non-Reimbursable 8-1 Freddie Mac Document Expense Reimbursement desk Reference iii October 2017 Chapter 12 - About Your Expense Reimbursement desk Reference We created this desk Reference to give you quick and easy access to information that will help you complete your Expense Reimbursement claims.

4 Each section contains requirements and guidelines to help you prepare and submit an accurate and complete claim to us via the Reimbursement System. Refer to Single-Family Seller/Servicer Guide (Guide) Chapter 9701 for detailed requirements on Expense Reimbursement . If you have any questions about completing your Expense Reimbursement claims after reviewing this desk Reference , please contact Customer Support at 800- Freddie . About Your Expense Reimbursement desk Reference Expense Reimbursement desk Reference Freddie Mac Document October 2017 iv This Page Intentionally Left Blank Freddie Mac Document Expense Reimbursement desk Reference 1-1 October 2017 Chapter 12 - The Reimbursement System Chapter 1 Using the Reimbursement System You are required to submit all of your Expense Reimbursement claims via the Reimbursement System available on How to Obtain Your User ID and Password for the Reimbursement System If you do not already have access to the Reimbursement System, a vice president or more senior officer from your organization must complete Form 1200, Reimbursement System User Setup Form, to designate an individual in your organization to serve as system administrator.

5 The system administrator will obtain an initial user ID, vendor code and password from us for your organization, and will be responsible for administering user IDs, the vendor code, and passwords in accordance with the Freddie Mac Reimbursement System User s Guide. For additional information, refer to Single-Family Seller/Servicer Guide (Guide) Chapter 9701. To access Form 1200, perform the following steps: 1. Access the Servicing page at the following URL on : The Servicing page displays. Reimbursement System Expense Reimbursement desk Reference Freddie Mac Document October 2017 1-2 2. Scroll down and click on the Reimbursement System User Setup Form. The Reimbursement System User Setup Form displays. 3. Complete and return the form to or fax it to 571-382-4919. Reimbursement System Freddie Mac Document Expense Reimbursement desk Reference 1-3 October 2017 How to Access the Reimbursement System Perform the following steps to access the Reimbursement System: 1. Access the Servicing page at the following URL on : 2.

6 Click Log In under Reimbursement System. 3. Enter your user name and password. 4. Click Log In to access the application. After you access the Reimbursement System, you are ready to being entering your data. For specific instructions on how to enter data for your claims, refer to the Freddie Mac Reimbursement System User s Guide. Reimbursement System Expense Reimbursement desk Reference Freddie Mac Document October 2017 1-4 This Page Intentionally Left Blank Freddie Mac Document Expense Reimbursement desk Reference 2-1 October 2017 Chapter 12 - Preparing and Submitting Your Claims Chapter 2 You must submit all Expense Reimbursement claims via the Reimbursement System. You are not required to submit supporting documentation for Expense Reimbursement claims, unless we request documentation for specific expenses . If we request supporting documentation, you must submit the documentation to us within the timeframe outlined in our request. You may only receive Reimbursement of expenses and payment of incentives via Automated Clearing House (ACH) credit entries into your commercial checking accounts.

7 To receive ACH credit entries or to make changes to ACH credit account instructions previously provided, refer to Guide Exhibit 98, Expense Reimbursement /Incentive Payment Authorization Agreement for ACH Credits, and follow the outlined steps, including submitting the form to the address provided along with a copy of the most recent IRS Form W-9. Note: If you are a Master Servicer with a subservicing arrangement, Reimbursement of expenses may be credited to the subservicer. However, payment of incentives will be credited directly to you and you will be responsible for providing any funds due to the subservicer in accordance with any applicable subservicing agreement. Preparing and Submitting Your Claims Verify that you do not exceed Freddie Mac s approved Expense limits, unless you have submitted a request for pre- approval (RPA) via the Reimbursement System and we have provided approval. For a complete listing of Freddie Mac s approved Expense amounts, refer to Single-Family Seller/Servicer Guide (Guide) Exhibit 57, 1-4 Unit Property Approved Expense Amounts, and Guide Exhibit 57A, Approved Attorney Fees and Title expenses , or Chapter 5, 1-4 Unit Property Approved Expense Amounts, in this desk Reference .

8 Forwarding Remittances You are required to forward non-REO related funds and REO related funds to us within 10 business days of your receipt of the funds. Such funds typically include, but are not limited to, mortgage insurance claim proceeds and property insurance claim proceeds. For additional information, refer to Guide Section For: You must: Non-REO related funds Forward the funds via check payable to the Federal Home Loan Mortgage Corporation and include the Freddie Mac loan number along with copies of related documentation with the check. Preparing and Submitting Your Claims Expense Reimbursement desk Reference Freddie Mac Document October 2017 2-2 For: You must: REO related funds Forward the funds via check or wire transfer. Remittances forwarded by check must be payable to the Federal Home Loan Mortgage Corporation and include the Freddie Mac loan number along with copies of related documentation with the check. Remittances forwarded by wire transfer must Reference the Freddie Mac loan number, address of property, and the type of proceeds ( , REO repurchases, mortgage insurance claim proceeds, and property insurance claim proceeds).

9 Do not offset any expenses against property insurance claim proceeds or mortgage insurance claim proceeds. Send your remittance to the following address: Non-REO-Related Remittances JP Morgan Chase Dallas National Wholesale LB TX 1-0029 14800 Frye Road Fort Worth, TX 76155 Attn: HomeSteps #730453 REO-Related Remittances Freddie Mac Box 730453 Dallas, TX 75373-0453 Attn: Cash Remittances Wire Transfer for REO-Related Remittances Bank Name: JPMorgan Chase Bank, NA Location: McLean, Virginia Routing Number: 021000021 Account Number: 9102418887 Expense Offsets You must deduct certain funds such as positive escrow balances at default, interest on Escrow balances, property insurance and primary mortgage insurance premium refunds from expenses incurred. Your requested Expense reimbursements must be offset by the positive escrow balance at DDLPI. Funds remaining in the borrower's escrow account at default must be accounted for with your Reimbursement request as income to offset expenses .

10 Payments or refunds received after the DDLPI must be offset using income code 815000 (Other Income). Funds remaining in a temporary buydown account before the foreclosure action was started must be applied as set forth in Guide Section You are also required to offset any incurred reimbursable expenses with the proceeds of rental income you receive during the foreclosure or REO holding period. Preparing and Submitting Your Claims Freddie Mac Document Expense Reimbursement desk Reference 2-3 October 2017 Mortgage insurance premium refunds should be refunded directly to Freddie Mac by the MI on the claim for loss. If, however, the MI sends a refund of the mortgage insurance premium to you directly, you must credit the MI premium refund on the claim as income when it submits a request for Expense Reimbursement . In the following instances, Freddie Mac will bill you for the funds on the Performing Loans Servicer Billing Statement or the Servicer Non-Performing Loans Invoice, respectively: If the income you reported exceeds the expenses requested If you have no expenses currently being processed to offset the income that is due to Freddie Mac You must not offset anticipated or received mortgage insurance claim payments, property insurance claim proceeds or sales proceeds against any expenses incurred.